iPhone total cost of ownership

I have been reviewing Telefonica Movistar’s iPhone page, where they list the various pricing plans available. The short version: cheapest iPhone you can own, having to stick to a two-year commitment is 845 Euros, if you switch to Movistar from another mobile operator, such as Orange or Vodafone. This is the 8GB version, with a base price of 299 Euros, and a monthly minimum bill of 24 Euros. If you opt for the 16GB version and the most expensive plan, which will set you back a whooping 115 Euros a month, you can have the iPhone for zero Euros…but you will have paid 2.760 Euros after two years!!!

There is no word on the legal terms regarding contract switching, so it’s unclear if once you pick a plan, you have to stick with it for the two years. Both data plans feature unlimited data on both the 2G/3G network, and Telefonica’s WiFi hotspots, but the cheaper plans drop in speed once you have used 200MB of data, versus 1GB for the most expensive versions.

What is very interesting to compare is the percentage difference in purchase price versus the total cost of ownership (TCO). The cheapest 16GB iPhone is 20% more expensive to purchase than the 8GB version, but at the end of the contract, it has only been 7% more expensive to purchase. It’s even more shocking that the 16GB iPhone purchase price for the third cheapest voice+data plan (55 Euro/month) is 122% more expensive, but the TCO difference is only 4.4%!

The bottom line of all this is – buy the 16GB version, you’re only paying at most 7% more, and you can fit twice as many songs and movies. For those of you wanting to pore over the charts, here they are: